Contracting for Public Services

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Contracting for Public Services

• Objectives, Issues and Options

City Council Workshop October 13, 2007
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Contracting for Public Services Objectives,
Issues and Options
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Option A2 (Criteria)

• Restrict use of contracting to certain
  circumstances or criteria (below). Staff would
  return with an evaluation of which currently
  outsourced services do not meet the criteria, and
  what the service and financial impacts would be
  of transitioning those services in-house.
• Pooling of contracted employees would provide
  significant benefits that City staffing could not
  provide.
• Service requires technical or special expertise
  that City staff could not or do not provide, and
  is outside of core service mission of the
  department.
• Service by contractor staff does not have
  significant interaction, communication or
  engagement with the community, and service is not
  expected to significantly affect customer service
  provided.
• Service is needed on an interim or emergency
  basis, or for a pilot period of time.
• The service requires substantial space to house
  the staff and/or equipment to provide the
  service, which is not available within City
  facilities or cannot be leased.
• The service requires significant equipment or
  other capital investment and maintenance, which
  a private contractor could better amortize the
  costs or maximize use of the equipment compared
  to the City.
• Service is new or uncertain, and the City would
  rather transfer that uncertainty to another
  entity until more information or experience is
  gained. Or the service is assessed to entail a
  certain level of risk that the City would rather
  transfer to an outside party. Specific risk
  issues would always be evaluated by staff and
  incorporated as part of budget development for
  workers compensation and liability exposures.
• Service would supplement City jobs by having
  contractors perform more labor-intensive,
  rudimentary tasks, freeing up City employees to
  perform more skilled functions. An accompanying
  reduction in work-related injury, public
  liability claims and employee lost time would be
  expected.

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Introduction

• Clarity
• Staff workplan and performance
• Employee certainty
• Budget preparation (Priority?)
• Purpose today
• Understand current practice
• Review Policy Paper
• Goals, issues and options
• Develop policy (return for formal approval)

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Policy Development
Policy
Examples History Data
Pros or Cons Others to consider? Impacts
Agreement? Others to consider?
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Current Practice

• Contractual vs. Professional
• Small percentage (4-5)
• No involuntary employee job loss

• Current Major Contracts
• Over 1 M annually
• Lifeguards
• Landscaping
• Tree Trimming
• Parking Citation Processing
• Parking Operations

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What other cities do
Custodial (10) Landscape/Tree Trimming
(7) Print Shop/Water Billing (4) Vehicle
Maint/Street Maint/Parking Lot Ops (3) Facility
Maint (2)
(Services provided partially by contract in
Santa Monica)
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Policy Objectives

• Responsive Service/Performance
• Employee Fairness
• Socially Responsible
• Financially Feasible

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Issues Responsive Service

• Challenges

• Benefits

• Poor service
• Quality control
• Uncontrollable cost
• Over reliance
• Not invested -gt poor customer service
• Administrative problems

• Pooling
• Specialized
• Allocation of routine
• Emergency/interim
• Space and capital
• Transfer of risk or uncertainty

Key Adequate supervision, monitoring, measuring
and reporting
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Example Pier Custodial Service

• January 2007
• Concern - level of service, flexibility of
  workforce, Pier Maintenance succession planning
• March 2007 core concern key and policy issue of
  the PRC was the delivery of the highest possible
  level of service.
• 30-day cancellation,
• accountability and oversight
• Ongoing financial and operational analysis

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• October 2007 high quality of service
• For the first time in recent memory, the
  condition of the restrooms was not a source of
  complaints during peak summer months. In fact,
  several comments were relayed that people
  actually didnt mind using the restrooms on the
  Pier, truly a first.
• Checklist, grading, oversight

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Issues Responsive Service

• Staff angst of bringing services in-house
• Time and complexity of Civil Service
• Lengthen processing time
• Example - Progressive discipline steps
• Space!

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Issues Employee Fairness

• History last 20 years
• No involuntary terminations due to contracting
• Placements
• Employee Group Concerns
• Probation waiver
• Seniority
• Other

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Issues Social Responsibility

• Mixed benefit levels
• Living Wage
• Health Care

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Issues Financial Feasibility

• Five Year Forecast little capacity for ongoing
  costs
• Long term cost effectiveness mixed
• In source example
• Why less expensive?
• Benefit levels 40
• Structural - pooling, cost spreading

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Options Responsive Service
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Options Employee Fairness
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Options Social Responsibility
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Options Financial Feasibility
(1) Continue with existing contracts within
planned resources. No significant tradeoffs
manage with budget process
(2) Change practice and evaluate tradeoffs in
services or identify new revenues
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Summary

• Existing Practice ? Policy
• Improve Monitoring, Measuring and Reporting
• No involuntary terminations probation waiver
  
• Advocate for and/or monitor health care
  legislation
• Stay within planned resources no significant
  tradeoffs
• () Recommendation CMO presented to MEA

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Summary

• Develop a formal policy
• Right Goals?
• Issue Clarification
• Discussion of Options

Direction for draft policy
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Contracting for Public Services Objectives,
Issues and Options
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